Ruling: Pabriga and his co-workers were GMA7’s regular employees,
not project employees, and they were illegally dismissed.

Definitions:

“Regular employees perform activities that are usually necessary
or desirable in the employer’s usual business or trade.”

“Project employees perform activities that may be usually necessary
or desirable in the usual business or trade of the employer.” (For
example, a construction company engages in various projects like a twenty-five-storey
hotel in Makati; a residential condominium building in Baguio City; and
a domestic air terminal in Iloilo City. Employees who are hired for the
carrying out of one of these separate projects, the scope and duration
of which has been determined and made known to the employees at the time
of employment, are properly treated as “project employees,”
and their services may be lawfully terminated at completion of the project.)

“Project employees perform activities that may not be usually necessary
or desirable in the usual business or trade of the employer.” (For
example, a steel company engages in fish production or cultivation
of vegetables.)

A project employee or a member of a work pool may acquire the status of a regular
employee.

Background facts

Carlos Pabriga, Geoffrey Arias, Kirby Campo, Arnold Lagahit, and Armando Catubig worked as television technicians for GMA7 in the late 1990s. Their work
included manning of technical operations center and acting as transmitter/VTR
men, maintenance staff, and cameramen. They were repeatedly rehired in several
fixed term contracts from 1996 to 1999.

Pabriga and his co-workers originally filed in July 1999 a complaint for non-payment
of benefits with the National Labor Relations Commission (NLRC). Later on, they
amended their complaint by raising the issues of unfair labor practice, illegal
dismissal, damages, and attorney’s fees.

Pabriga and his co-workers claimed that they were GMA7's regular employees.
On the other hand, GMA7 claimed that they were merely hired as
“pinch-hitters” on fixed term contracts.

Labor Arbiter rules against Pabriga and his co-workers

The Labor Arbiter dismissed the complaint for illegal dismissal and unfair
labor practice, but held GMA 7 liable for 13th month pay.

The NLRC ruled that Pabriga and his co-workers were regular employees with respect
to the particular activity to which they were assigned, until it ceased to exist.
As such, they were entitled to payment of separation pay computed at one month
salary for every year of service.

The NLRC also ruled that Pabriga and his co-workers were entitled to 13th month
pay, night shift differential, and service incentive leave pay.

GMA7 elevated the case to the Court of Appeals through a petition for certiorari.
On September 8, 2006, the CA denied the petition for lack of merit.

Supreme Court ruling: Pabriga and his co-workers were regular employees, not
project employees, and they were illegally dismissed

The Supreme Court affirmed the findings of the NLRC and the CA that Pabriga
and his co-workers were GMA7’s regular employees and that they were illegally
dismissed.The Court ruled:

(1) Pabriga and his co-workers were not project employees because the manning
of the operations center to air commercials, acting as transmitter/VTR men,
maintaining the equipment, and acting as cameramen were not undertakings separate
or distinct from the business of a broadcasting company.

(2) Even if Pabriga and his co-workers are to be considered as project employees,
they attained regular employment status because GMA7 continuously rehired them.(3) GMA7 did not report the completion of its projects and the dismissal of
Pabriga and his co-workers in its finished projects to the nearest Public Employment
Office as required by Policy Instruction No. 20 of the Department of Labor and
Employment. Based on jurisprudence, the failure of an employer to report to
the nearest Public Employment Office the termination of its workers’ services
every time a project or a phase is completed indicates that the workers are
not project employees.

(4) GMA7’s
practice of hiring and rehiring of workers on fixed terms, without end, is unjustifiable.

Difference between regular employee and project employee

A regular employee performs activities
that are usually necessary or desirable in the employer’s usual business
or trade.

A project employee performs activities that may or may
not be usually necessary or desirable in the usual business or trade of
the employer.

The services of the project employees are legally and automatically terminated
when the project ends or is completed.

The principal test for determining whether employees are “project employees”
is two-fold:

(1) Is the employee assigned to carry out a specific project or undertaking?

(2) Is the completion or termination of the project specified or determined
at the time the employee was engaged for that project?

Definition of “project”

The term “project” must be properly defined in order to safeguard
the rights of workers against the arbitrary use of the word “project”
by employers to prevent them from attaining the status of regular employees.

(1) The “project” would ordinarily have some relationship to the
usual business of the employer.

For example, a construction company ordinarily carries out two or more [distinct]
identifiable construction projects: a twenty-five-storey hotel in Makati; a
residential condominium building in Baguio City; and a domestic air terminal
in Iloilo City. Employees who are hired for the carrying out of one of these
separate projects (the scope and duration of which has been determined and made
known to the employees at the time of employment), are properly treated as “project
employees,” and their services may be lawfully terminated at completion
of the project.

(2) Exceptionally, the “project” job or undertaking is not within
the regular business of the employer. The job or undertaking is identifiably
separate and distinct from the ordinary or regular business operations of the
employer. The job or undertaking also begins and ends at determined or determinable
times. For example, a steel-making company, for one reason or another, undertakes
the breeding and production of fish or the cultivation of vegetables.

Examples of regular employee and a project employee

Although essentially a telephone company, PLDT maintains its own accounting
department to which Ylagan was assigned. PLDT was not able to prove that
accounting duties were distinct, separate and identifiable from its usual
undertakings.

The private respondent was hired to repair furnaces, which are needed
by San Miguel Corporation to manufacture glass, an integral component
of its packaging and manufacturing business.

San Miguel Corporation is not engaged in the business of repairing furnaces.
Although the activity was necessary to enable it to continue manufacturing
glass, the necessity for the repairs arose only when a furnace reached
the end of its life or operating cycle.

Private respondent is therefore a project employee.

A project employee or a member of a work pool may acquire the status of a regular
employee when the following concur:

(1) The project employee is continuously rehired even after a project has ended;
and

(2) The alleged project employee performs tasks are vital, necessary, and indispensable
to the usual business or trade of the employer.

Difference between project employment and fixed period/fixed term employment

GMA7 interchangeably characterized Pabriga and his co-workers’s service
as project employment and fixed term employment. But these types of employment are not
the same.

Project employment

The employee’s services are coterminous with the project.
The employment may, in fact, last for more than a year, depending on the
needs or circumstances of the project.

Fixed period/fixed term employment

Duration of employment is agreed upon by the parties.

The decisive determinant in fixed-term employment is not the activity that the
employee is called upon to perform but the day certain agreed upon by the parties
for the employment relationship to commence and terminate.

The use of fixed-term employment is subject to abuse by employers who want to
deprive workers of their security of tenure. In this situation, the fixed term
or period should be struck down as contrary to public policy or morals.

Indications
or criteria under which “term employment” does not circumvent the
law on security of tenure:

(1) The fixed period of employment was knowingly and voluntarily agreed upon
by the parties without any force, duress, or improper pressure being brought
to bear upon the employee and absent any other circumstances vitiating his consent;
or

(2) The employer and the employee dealt with each other on more or less equal
terms with no moral dominance exercised by the former or the latter.

To prove the fixed term contracts, GMA7 presented cash disbursement vouchers
signed by Pabriga and his co-workers, stating that they were merely hired as
“pinch-hitters.” The
Court observed that Pabriga and his co-workers were in no position to refuse
to sign these vouchers, as refusal would entail not getting paid for their services.
Plainly, Pabriga and his co-workers as “pinch-hitters” cannot be
considered to be on equal footing as GMA7 in the negotiation of their employment
contract.

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